Author: Andrew Muhammad

The Tomato Suspension Agreement (TSA) between the U.S. and Mexico, first established in 1996, was designed to regulate the importation of Mexican tomatoes. This agreement emerged from an antidumping investigation aimed at determining whether imports of fresh tomatoes from Mexico were being sold at less than fair market value. Under the TSA, Mexican tomato producers agreed to sell fresh tomatoes in the U.S. market at set reference prices, and in return, the U.S. suspended the antidumping duty investigation. The first suspension agreement became effective in November 1996. Over the years, the U.S. Department of Commerce and Mexican signatories have entered into revised suspension agreements in 2002, 2008, and 2013, with the most recent becoming effective in September 2019 (Federal Register, 2019).

On April 14, 2025, the U.S. Department of Commerce announced its intent to withdraw from the 2019 Agreement, citing its failure to protect U.S. producers from “unfairly” priced Mexican tomatoes. Upon termination—effective in 90 days—antidumping duties of around 21% will be imposed on most Mexican tomatoes (Spiegelman, 2025). This decision could have a significant impact on imports, benefiting domestic producers. However, these duties (i.e., tariffs) could also reduce the economic activity associated with tomato supply chains and increase consumer prices.

The basic premise of an antidumping investigation is to determine whether imported goods are being sold in the U.S. market at less than fair value, often referred to as “dumping.” This practice can harm domestic producers by depressing local prices and causing financial distress. Concerns about imports of Mexican tomatoes have been driven by a significant surge in imports over the last two decades. Since 1995, imports from Mexico have grown by nearly 700% in value, from $406 million in 1995 to $3.1 billion in 2024. In terms of quantity, imports from Mexico have increased by around 220% (USDA-FAS, 2025).

What is even more concerning is that this growth occurred even as U.S. production declined, and per capita availability increased. In 1995, the year prior to the agreement, domestic tomatoes accounted for over 70% of the total U.S. supply. This situation has now completely reversed, with imported tomatoes accounting for 70% of the total U.S. supply in 2025 (USDA-ERS, 2025a). Almost all imports come from Mexico, which accounted for around 90% of U.S. tomato imports in 2024 (USDA-FAS, 2025). Despite the surge in imports, is there evidence to suggest that domestic prices have been depressed, impacting U.S. tomato growers?

From 1995 to 2024, the U.S. saw a significant rise in the importation of Mexican tomatoes (Figure 1). The quantity of tomatoes imported from Mexico surged from approximately 1.3 billion pounds in 1995 to over 4.4 billion pounds in 2024. Alongside this rise in quantity, import prices also increased, starting at about 31 cents per pound in 1995 and reaching nearly 74 cents per pound in 2024. This upward trend in prices could be the result of the suspension agreements where Mexican signatories agreed to sell at increasingly higher prices. However, various factors, such as increased demand, changes in production costs, and market dynamics, likely contributed to this high correlation. Comparing Mexican tomato import prices to U.S. tomato farm prices and the U.S. Producer Price Index for all fresh vegetables shows little evidence of domestic price depression from imports (Figure 2). There is a positive correlation between import prices and U.S. farm prices, with a consistent upward trend. While it could be argued that prices would have grown at a faster rate without the surge in imports, overall vegetable prices suggest that this is not the case. In fact, import prices often exceeded both U.S. farm prices and overall vegetables prices.

In closing, while increased barriers on Mexican tomatoes might benefit U.S. tomato producers, there are other factors to consider. In 2024, the U.S. imported almost 2.0 million metric tons (over 4.0 billion pounds) of fresh tomatoes from Mexico, valued at more than $3.0 billion. According to a recent study by Texas A&M University, these imports generated an estimated $8.3 billion in total economic impact, including $3.6 billion in direct effects and $4.7 billion in indirect and induced effects, supporting approximately 47,000 U.S. jobs (Ribera et al., 2025). This suggest that there is more at stake if the U.S. eliminates the suspension agreement.

Figure 1. Import price and quantity of Mexican tomatoes: 1995–2024

Figure 2. Comparison of import and domestic prices: 1995–2024 

References

Bureau of Labor Statistics (BLS) (2025). Inflation and Prices, Prices – Producer, Commodity Data. https://www.bls.gov/data/

Federal Register (2019). Fresh Tomatoes From Mexico: Suspension of Antidumping Duty Investigation. https://www.federalregister.gov/documents/2019/09/24/2019-20813/fresh-tomatoes-from-mexico-suspension-of-antidumping-duty-investigation

Ribera, L.A., L. Young, S. Zapata, D. Hanselka, and D. McCorckle (2025). Economic Impact Analysis of Fresh Mexican Tomatoes Imported by the United States. Center for North American Studies, Texas A&M University System. https://agecoext.tamu.edu/wp-content/uploads/2025/04/2025.02.Update-Estimated-Impact-Analysis-of-Mexican-Tomatoes-Imported-by-the-United-States.pdf

Spiegelman, M. (2025). “Commerce moves to end tomato deal with Mexico, reimpose duties” Inside U.S. Trade (April 15). https://insidetrade.com/daily-news/commerce-moves-end-tomato-deal-mexico-reimpose-duties

U.S. Department of Agriculture, Economic Research Service (USDA-ERS) (2025a). Vegetables and Pulses Yearbook Tables. https://ers.usda.gov/data-products/vegetables-and-pulses-data/vegetables-and-pulses-yearbook-tables

U.S. Department of Agriculture, Economic Research Service (USDA-ERS) (2025b). Price Spreads from Farm to Consumer https://www.ers.usda.gov/data-products/price-spreads-from-farm-to-consumer

U.S. Department of Agriculture, Foreign Agricultural Service (USDA-FAS) (2025). Global Agricultural Trade System. https://apps.fas.usda.gov/gats/default.aspx

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Muhammad, Andrew, and Luis A. Ribera. “Tomato Trade Wars: How the Suspension Agreement with Mexico Shapes the U.S. Market.” Southern Ag Today 5(18.4). May 1, 2025. Permalink

After numerous rounds of reciprocal tariff hikes, the tariffs between the U.S. and China have escalated to 145% and 125%, respectively. This raises a critical question: Can U.S. agricultural exports to China withstand such steep retaliatory tariffs? To delve deeper into this issue, let’s examine the impact of prohibitively high tariffs on U.S. beef exports, a significant component of U.S. agricultural trade with China.

As noted in a previous article, China has emerged as a major player in global beef trade. Although once a minor importer, China is now the largest beef importing country in the world. In 2010, Chinese beef imports were only $84 million, but by 2022, they increased by 21,000% to nearly $18 billion (See SAT: https://southernagtoday.org/2022/12/01/china-emerges-as-a-leading-destination-for-u-s-beef-exports/). This remarkable rise can be attributed to several factors, including economic growth, urbanization, and changing preferences for quality protein sources. The increase in imports was further accelerated by the outbreak of African Swine Fever in 2018, which decimated pork supplies and led to a significant shift towards beef. Due to rising demand and imports, coupled with lifting the import restriction on U.S. beef in 2017, China is now the third largest foreign market for U.S. beef behind South Korea and Japan (USDA, 2025).

Since 2017, the U.S. has significantly increased its beef exports to China. In 2018, U.S. beef exports were valued at around $64 million, but by 2024, increased to approximately $1.5 billion (See Figure 1). As the figure shows, Brazil is the leading exporter of beef to China, reaching approximately $6.2 billion in 2024 (45% of total Chinese imports). Other noted suppliers include 

Argentina, Australia, New Zealand, and Uruguay. 

The figure underscores the competitive landscape of imported beef in China, with the U.S. emerging as a key player alongside Argentina, Australia, Brazil, New Zealand, and Uruguay. We can assess the impact of tariffs on these countries using price elasticity estimates from previous research (Hossen and Muhammad, 2025). The price elasticity refers to how the quantity imported responds to changes in import prices (own or competitor’s). Based on estimates from previous research, U.S. beef exports to China could decline by more than 77% in the short run, amounting to more than $1.0 billion in lost export sales. In the long run, U.S. beef exports to China will likely fall to zero if the high tariff persists. Interestingly, competing beef exports from Brazil and other countries could also decline (although by much smaller values) due to complementarities in importing. However, our estimates suggest that Uruguay could possibly benefit, but the benefit would be a fraction of U.S. losses. The U.S. has managed to capture a substantial share of the Chinese beef market (11% in 2024). Challenges posed by recent tariffs and trade barriers could cause the U.S. to lose it all.

Figure 1. Chinese Beef Imports: 2010 – 2024

For more information:

Hossen, M.D. and Muhammad, A. (2025). “Assessing the Impacts of Maritime Freight Rates on Global Beef Trade” Agribusiness. https://doi.org/10.1002/agr.22030

USDA (2025). Global Agricultural Trade System. Foreign Agricultural Service. https://apps.fas.usda.gov/gats/default.aspx

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Muhammad, Andrew, and Md Deluiar Hossen. “High Tariffs Could Halt U.S. Beef Exports to China.” Southern Ag Today 5(16.4). April 17, 2025. Permalink

To say that international trade has dominated the news in recent weeks would be an understatement. Last month, President Trump followed through on his promise to impose 25% tariffs on Canada and Mexico, and an additional 10% on China. While Mexico—and to a lesser extent, Canada—received another temporary reprieve, the threat of tariffs still looms.

It is crucial to understand the potential impacts of these tariffs on U.S. agriculture. In his recent State of the Union Address, as well as in subsequent social media posts, President Trump claimed that the new round of tariffs would result in increased domestic agricultural sales. There is an element of truth to this claim. According to economic theory, tariffs can lead to a rise in domestic sales—if the imported product directly competes with a similar domestic product. However, this does not apply to commodities like soybeans or cotton, as the U.S. exports far more of these products than can be consumed domestically. For example, more than 70% of U.S. cotton production is exported. In fact, these sectors are particularly vulnerable because they are often the target of retaliatory tariffs. Also, any increase in domestic sales resulting from tariffs has less to do with firms facing less competition and more to do with the fact that tariffs lead to higher domestic prices. These higher prices, in turn, encourage more domestic producers to sell their products. While this benefits producers, it unfortunately disadvantages importing firms and consumers, with the disadvantages far outweighing any gains. 

Imports should not be regarded solely as competition to American production. This perspective neglects the essential role imports play in meeting demands that exceed domestic capabilities. International trade is far more complex than the simplistic notion that “exports are good, imports are bad.”

Tequila, an agricultural product imported entirely from Mexico and cannot be produced elsewhere, serves as a prime example for examining the harmful impacts of proposed tariffs. U.S. imports of distilled spirits have soared by over 300% since 2000, largely driven by the extraordinary growth in tequila imports. Between 2000 and 2024, tequila imports skyrocketed by 1,400%, rising from $350 million to $5.4 billion (Figure 1). In 2024, U.S. agricultural exports totaled $176 billion, while imports reached $214 billion, resulting in an agricultural trade deficit of $38 billion. Remarkably, tequila alone accounts for over 14% of this deficit, despite being a single, highly differentiated product. Over the past decade, our growing taste for tequila has driven a more than five-fold surge in demand and imports. Imagine the outrage if tequila imports were banned simply to address the agricultural trade deficit.

I recently conducted research on the impact of a 25% tariff on Mexico and Canada on U.S. imports of distilled spirits (https://doi.org/10.1002/agr.22034). My findings indicate that such a tariff would reduce imports by over $1 billion, far outweighing any potential tariff revenue gains. This overall decline is primarily driven by a significant drop in tequila imports, though imports of other spirits would also decrease due to complementarities in importing.

It could be argued that these losses would primarily impact the exporting country—Mexican tequila companies. However, this perspective overlooks the fact that U.S. tequila consumption also supports American bars, retailers, wholesalers, and distributors. When factoring in the downstream economic impact, the losses become even more substantial. Clearly, it would be difficult to prove that American largess is enriching Mexican agave farmers at the expense of U.S. agricultural producers.

Figure 1. U.S. Imports of Tequila and Other Spirits: 2000 – 2024

For more information:

Muhammad, A. (2025), Trump Tariffs 2.0: Assessing the Impacts on US Distilled Spirits Imports. Agribusiness. https://doi.org/10.1002/agr.22034

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Muhammad, Andrew. “Rethinking Tariffs: Tequila Shows There’s More to Imports Than Competition.” Southern Ag Today 5(12.4). March 20, 2025. Permalink

Brazilian beef was first banned in Japan in 2012 due to concerns over Bovine Spongiform Encephalopathy (BSE), also known as Mad Cow Disease. Brazil is currently in talks with Japan to begin beef shipments once again. Although Japanese imports of Brazilian beef were negligible prior to 2012, the possible reentry of Brazilian beef into the Japanese market could pose a significant challenge to U.S. beef exports. 

The importance of Japan to global beef trade and U.S. beef exports cannot be overstated. Japan is the third largest beef importing country in the world and the second largest market for the U.S. In 2024, U.S. beef exports reached $10.5 billion. That year, exports to Japan accounted for 18% of the total (USDA, 2025a, 2025b). While Japan is important to U.S. export disappearance, the U.S. is especially important to Japan as its leading supplier. In 2024, for instance, Japan imported $1.8 billion worth of U.S. beef. This was 43% of Japan’s total beef imports, exceeding imports from Australia ($1.7 billion and 39%), and significantly larger than countries such as Canada, New Zealand, and Mexico. Despite the current strong position of U.S. beef in Japan, this could be challenged by the reentry of Brazilian beef into the Japanese market.

Around the time of the U.S.-China trade war in 2018, Brazil emerged as the leading global beef exporter, surpassing the U.S., Australia, and India (Figure 1). The rise of Brazil as a major beef exporter is largely due to increased demand in China. (https://southernagtoday.org/2023/01/12/chinas-import-of-u-s-beef-continues-to-increase-but-how-does-the-u-s-compare-to-other-competing-countries/). As China emerged as the leading beef importing country (almost $14 billion in 2024), Brazil became its leading supplier accounting for 45% of total Chinese imports in 2024, far exceeding other exporting countries.

With exports already exceeding those of major exporters such as the U.S. and Australia, does Brazil have the capacity to gain a significant share of the Japanese foreign beef market? In 2024, cattle and beef production in Brazil was based on 192.5 million head of cattle (including all beef and dairy cows and calves). Over the past couple of years, Brazil’s national cow herd has been liquidating, leading to higher supplies of slaughter cattle and total production. Last year, Brazil’s national herd was reduced by 2% and was expected to continue shrinking midway through 2025 (Aquino, 2024). Despite the shrinking herd, Brazil has maintained its share of world trade. Given the expectation of rebuilding, Brazil’s herd could rebuild at a higher pace to capitalize on the new demand from the Japanese market.

Future Japanese demand will be based on a combination of quality and quantity. Over the last few decades, Japanese beef consumers have trended more towards the preferences of the typical U.S. beef consumer. Products like ground beef, steaks, burgers, and fajitas have become increasingly popular in Japan. The key question is whether Brazil can match the quality of U.S. beef in Japan. Quantity is a lesser obstacle for Brazil with this potential market opportunity.

Figure 1. Beef and Veal Exports (Top Countries): 2000 – 2025(F)

References

Aquino, Camila. (2024). Livestock and Products Semi-annual: Brazil. Report Number: BR2024-0001. USDA, Foreign Agricultural Service.

USDA. (2025a). Production, Supply, and Distribution Online (PSD Online). Foreign Agricultural Service. https://apps.fas.usda.gov/psdonline/app/index.html#/app/home

USDA. (2025b). Global Agricultural Trade System (GATS). Foreign Agricultural Service. https://apps.fas.usda.gov/gats/default.aspx

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Muhammad, Andrew, Charles Martinez, and Md Deluair Hossen. “Market Showdown: U.S. Beef Faces New Challenges in Japan Amid Brazilian Reentry.” Southern Ag Today 5(10.4). March 6, 2025. Permalink

A trade deficit occurs when the value of a country’s imports exceeds its exports. Although we often refer to the overall trade deficit (all goods), there is a growing concern about the rising U.S.  agricultural trade deficit. Recall that the most recent trade outlook report published in May 2024 by the Economic Research Service and Foreign Agricultural Service – agencies of the U.S. Department of Agriculture (USDA) – projected the highest agricultural trade deficit to date in fiscal year (FY) 2024 (October 2023 – September 2024). The FY2024 forecast have has U.S. agricultural exports at $170.5 billion, but imports at $202.5 billion. If these projections hold true, the resulting agricultural trade deficit would be a record $32 billion. To put this in context, U.S. agricultural exports have far exceeded imports in past years. It is only in recent years that U.S. agricultural trade became more balanced. FY2023 was the first year the U.S. experience a significant agricultural trade deficit ($16.7 billion), which is half the projected deficit for FY2024 (Kaufman et al., 2024). In a previous Southern Ag Today article we discussed how declining agricultural exports have contributed to the growing U.S. agricultural trade deficit. In this article we discuss the contribution of rising agricultural imports.

U.S. agricultural imports are very different from exports. U.S. agricultural exports are dominated by bulk commodities like soybeans, corn, cotton and wheat, and minimally processed products like tree nuts, beef, and pork. Even though value added products like dairy products and prepared foods are also among top U.S. agricultural exports, U.S. agricultural imports are overwhelmingly higher value consumer-oriented products. In 2023, for instance, the major U.S. imports included fresh fruits ($18 billion), other vegetable oils ($13 billion), fresh vegetables ($12 billion), distilled spirits ($11 billion), beef products ($9 billion), coffee ($9 billion), soup and other prepared food ($7 billion), wine ($7 billion), and beer ($7 billion). Other than beef and maybe prepared foods, imports of these products greatly exceed their exports. For instance, U.S. imports of beer, wine, and spirits were around $25 billion in 2023, whereas U.S. beer, wine, and spirit exports were less than $4 billion (USDA, 2024).

Figure 1 shows the unit values for U.S. agricultural imports and exports from 2010-2023. On a per-unit basis ($/MT), U.S. imports are significantly more expensive than exports. Since 2010, imports have been two to three times more expensive. In 2023, the import unit value was $2,543/MT versus $919/MT for exports. U.S. agricultural exports were almost 190 million MT in 2023, while imports were only 77 million MT. However, imports were valued at $196 billion, while exports were valued at $174 billion. When considering the period where the U.S. experienced significant price inflation (2020–2022), import prices increased at a much higher rate that export prices, which is to be expected given that imports are made up of higher value consumer goods. During this period, the quantity of imports continued to increase despite rising prices, but the quantity of exports declined. The main takeaways from this article are the following. 1) U.S. agricultural imports are very different than exports; 2) imports are significantly more expensive and more subject to inflationary pressures than exports; and 3) imports have persistently risen despite rising prices in recent years, which was not the case for U.S. agricultural exports.

Figure 1. Import and Export Prices: 2010 – 2023

For more information

Kaufman, James, Hui Jiang, Bart Kenner, Angelica Williams, and Adam Gerval. (2024). Outlook for U.S. Agricultural Trade: May 2024. Report AES-128. U.S. Department of Agriculture. https://www.ers.usda.gov/publications/pub-details/?pubid=109252

U.S. Department of Agriculture (USDA). 2024. Global Agricultural Trade System (GATS). Foreign Agricultural Service. https://apps.fas.usda.gov/gats/default.aspx

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Muhammad, Andrew, and Md Deluair Hossen. “Understanding the Growing U.S. Agricultural Trade Deficit (Part 2): What is Happening with Imports?” Southern Ag Today 4(30.4). July 25, 2024. Permalink